Estalilla v. Commission on Audit
REITERATIONFacts
The Antecedents: This case concerns the disallowance of payments totaling P35,591,200.00 for garbage collection services rendered to the Municipality of Cabuyao, Laguna, by J.O. Batallones Trading and Construction. The contracts for these services were entered into on March 18, 2003, and May 1, 2005, and approved by the Sangguniang Bayan. An audit revealed that the payments for the 2004 garbage collections were improperly charged against the 2005 appropriation, violating provisions of the Local Government Code and the Auditing Code of the Philippines. Notices of Disallowance were issued, identifying several officials, including petitioner Elena A. Estalilla, as liable. Procedural History: Following the issuance of Notices of Disallowance (NDs) and the subsequent failure of the identified individuals to appeal within the six-month period, Notices of Finality of Decision (NFDs) and Orders of Execution (COEs) were issued. Petitioner Elena A. Estalilla filed an Omnibus Motion to lift these notices and to admit her appeal memorandum, admitting receipt of the NDs but denying receipt of the Audit Observation Memoranda (AOMs). The COA Regional Office denied this motion due to the expired appeal period. Estalilla then filed a petition for review with the COA proper, which was also dismissed by the COA on December 29, 2014, for being filed beyond the reglementary period, citing the immutability of judgment. The Petition: Petitioner Elena A. Estalilla seeks review of the COA's decision through a petition for certiorari, arguing that the COA committed grave abuse of discretion. She contends that her failure to file a timely appeal was due to preoccupation with other disallowances and that she was not fully apprised of the proceedings. Estalilla asserts that her role as Municipal Treasurer was limited to certifying the availability of funds, and she was not personally responsible for the budgetary and accounting errors. She further argues that filing a motion for reconsideration with the COA would have been futile given their consistent rejection of her pleas and denial of requests for crucial documents. The petition raises both procedural issues regarding the COA's refusal to consider her appeal and substantive issues concerning her personal liability for the disallowed amount.
Issue(s)
WHETHER RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT REFUSED TO GIVE DUE COURSE AND DISMISSED THE PETITION FOR REVIEW. WHETHER RESPONDENT COMMISSION ON AUDIT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT DISMISSED THE PETITION FOR REVIEW DESPITE ITS CLEAR AND EVIDENT MERITS.
Ruling
The Supreme Court GRANTED the petition for certiorari, SET ASIDE the decision of the Commission on Audit dated December 29, 2014, and MODIFIED the Notices of Disallowance, Notices of Finality of Decision, and Orders of Execution by DELETING the portion ordering the solidary liability of petitioner Elena A. Estalilla for the disallowed amount of P35,591,200.00.
Ratio Decidendi
On the procedural issue of non-filing of a motion for reconsideration: The Court found Estalilla's submission that filing a motion for reconsideration would be useless to be warranted. The Court reiterated that the rule requiring a motion for reconsideration before filing a petition for certiorari is not rigid and admits exceptions. In this case, the exceptions of a motion for reconsideration being useless and the denial of due process were applicable. Estalilla's averments that the COA consistently rejected her pleas and denied her requests for crucial documents, coupled with the COA's stance of invoking the lapsed period to appeal, indicated that further attempts to seek reconsideration would be futile. Furthermore, the denial of her request for disbursement vouchers and allotment and obligation slips (ALOBS) deprived her of the opportunity to present a meaningful defense, thus violating her right to due process. The urgency of the relief sought was also evident due to the COA's order to withhold Estalilla's salary and benefits. On the substantive issue of Estalilla's liability for the disallowed amounts: The Court ruled that the COA gravely abused its discretion in imposing personal liability on Estalilla. While the COA correctly cited the rule on the immutability of final and executory judgments, this rule bows to recognized exceptions, particularly when substantial justice is to be served, affecting matters of property, or when compelling circumstances exist. Estalilla's case involved her right to property, with a glaring disparity between her salary and the disallowed amount, and she had not personally benefited from the disbursements. The Court emphasized that under Section 344 of the Local Government Code, the treasurer's duty is limited to certifying the availability of funds, and liability only attaches if this certification is deliberately false. There was no showing of a false certification by Estalilla, nor was she directly responsible for the budgetary and accounting errors. Therefore, holding her personally liable without such a finding constituted grave abuse of discretion.
Main Doctrine
A municipal treasurer who merely certifies to the availability of funds is not liable for the disallowance of a disbursement unless she has falsified the certification. The Commission on Audit commits grave abuse of discretion in imposing personal liability on such treasurer when the disallowance has not been shown to be based on a false certification and when procedural due process has been denied.